A company's trial balance as of December 31, 2023, shows the following account balances:

• Cash: $60,000 (debit)
• Accounts Receivable: $40,000 (debit)
• Inventory: $30,000 (debit)
• Prepaid Expenses: $6,000 (debit)
• Equipment: $150,000 (debit)
• Accumulated Depreciation: $20,000 (credit)
• Accounts Payable: $25,000 (credit)
• Salaries Payable: $7,000 (credit)
• Common Stock: $75,000 (credit)
• Retained Earnings: $35,000 (credit)
• Sales Revenue: $220,000 (credit)
• Cost of Goods Sold: $85,000 (debit)
• Rent Expense: $15,000 (debit)
• Salaries Expense: $40,000 (debit)
• Utilities Expense: $7,000 (debit)
• Depreciation Expense: $7,000 (debit)
• Interest Expense: $3,000 (debit)
• Income Tax Expense: $12,000 (debit)

a. Prepare a statement of retained earnings for the year ended December 31, 2023, assuming dividends of $15,000 were declared and paid. b. Calculate the ending balance of retained earnings after considering the net income for the year. c. Discuss the implications of the prior period adjustment of $5,000 on retained earnings and financial reporting.